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27 MINUTES OF THE ANNUAL MEETING OF THE STOCKHOLDERS OF P. LORILLARD COMPANY, HELD IN THE TRIANON ROOM OF THE AMBASSADOR HOTEL, PARK AVENUE AT 51st STREET, NEW YORK, NEW YORK, ON APRIL 2, 1957, AT ELEVEN O'CLOCK IN THE FORENOON. Mr. Lewis Gruber, President of the Company, acted as Chair- man of the meeting in accordance w ith Section 4, Article II, of the By-laws of the Company, and Miss Anna F. Woessner, Secretary of the Company, acted as Secretary of the meeting. There were produced on behalf of the Board of Directors the transfer books and stock books of the Company, and there was presented a full, true and complete list, in alphabetical order, of all the stockholders of the Company entitled to notice of, and to vote at, this meeting and to vote at the ensuing election, with the residence of each and the number of shares held by each, to wit: The Stockholders of record at 3:30 P,M, on March 5, 1957, the record date fixed by the Board of Directors for the determination of the Stockholders entitled to notice of, and to vote at, this meeting. The Chairman stated that these books were produced and this list was presented as required by law for the inspection of the stockholders present; and such books and list remained open for inspection during the whole of the meeting. There was presented a copy of the Notice of the Meeting with Proxy Statement and form of Proxy, together with affidavits showing mailing thereof and publication of the notice of the meeting in accordance with law and the By-laws of the Company, the same being as follows: %0 ~ v ~ w N ~

P. LORILLARD COMPANY Notice of Annual Meeting of Stockholders TO BE HELD APRIL 2, 1957 To the Stockholders of P. Lorillard Company: NOTICE is hereby given that the Annual Meeting of the Stockholders of P. LORILLARD COMPANY, a New Jersey corporation, will be held at the Ambassador Hotel, Park Avenue and 51st Street, New York 21, N. Y., at eleven o'clock in the forenoon of April 2, 1957, for the followiing : (1) The election of thirteen (13) directors to hold office until the next Annual Meeting of Stockholders or until their successors are elected and qualified ; (2) To consider and vote upon the proposed amendment to Article XII of the By-laws of the Company relating to incentive compensation which is described in the annexed Proxy Statement; and (3) The transaction of such other business as may properly come before said meeting and any adj ournment or adj ournments thereof. The stock transfer books will not be closed, but only stockholders of record at the close of business on March 5, 1957, will be entitled to vote, notwithstanding any transfer of any stock on the books of the Company after such record date. ANNA F. WOESSNER, Secretary. Jersey City, N. J. March 1, 1957 If unable to be present at the meeting, please sign the enclosed Proxy and return it in the accompanying envelope so that the meeting may be properly held.

Proxy Statement RIGHT TO REVOKE PROXY ANY STOCKHOLDER giving the proxy enclosed with this statement has the power to revoke the proxy at any time prior to the exercise thereof. Your attention is called to the pro- vision of New Jersey law providing that the attendance at the meeting of a stockholder who may have theretofore given a proxy shall not have the effect of revoking the proxy unless the stockholder so attending shall in writing so notify the secretary of the meeting at any time prior to the voting of the proxy. Unless the persons named in the proxy are prevented by circumstances beyond their control from acting, the proxy will be voted at the said meeting and at any adjournment or adjournments thereof in the manner specified therein. BY WHOM AND THE MANNER IN WHICH THE PROXY IS BEING SOLICITED The proxy is solicited by and on behalf of the management of P. LORILLARD COMPANY. The expense of the solicitation of proxies for this meeting, including the cost of mailing, will be borne by the Company. In addition to the use of the mails, the Company may request persons holding stock in their name or custody, or in the name of nominees, to send proxy. material to their principals and request authority for the execution of the proxies and will reimburse such person for their expense in so doing at a total estimated cost of about One Thousand Five Hundred Dollars ($1,500). To the extent necessary in order to assure sufficient representation at the meeting, officers and regular employees of the Company, at no additional compensation, will request the return of proxies personally, by telephone or telegram. The extent to which this will be necessary depends entirely on how promptly proxies are received, and stockholders are urged to send in their proxies without delay. The management has no knowledge or information that any other person will specially engage any employees to solicit proxies. VOTING SECURITIES OUTSTANDING The outstanding number of each class of voting securities of the Company and the number of votes to which each class is entitled are as follows : i., Common Stock Preferred Stock Total Number of Shares ... 2,852,854 98,000 2,950,854 140 Number of Votes . . . 2,852,854 98,000 2,950,854 ~ w Only stockholders of record at the close of business on March 5, 1957, will be entitled ~ to vote. o 2

ELECTION OF DIRECTORS At this Annual Meeting, thirteen (13) directors are to be elected, who shall hold office until the next following Annual Meeting of Stockholders or until their successors are duly elected and qualified. It is the intention of the persons named in the enclosed form of proxy to vote such proxy for the election of the nominees named below. If any of the nominees named below is not a candidate for election as a director at the meeting- an event which the management does not anticipate-the proxies will be voted for a substitute nominee and the other nominees named below. Name o f corporation Principal in which such Name of Occupation or occupation is Nominee Employment carried on Approximate amount of each class of Year seeurities of the when Company beneficially first owned directly or elected indirectly as of Director February 25,1957 1946 2,000 shares of Common Stock 1943 2,000 shares of Common Stock Lewis Gruber President P. Lorillard Company Irvin H. Peak Executive P. Lorillard Company Vice President and Director of Leaf Activities Harris B. Parmele Vice President P. Lorillard Company and Director of Research Harold F. Temple Vice President P. Lorillard Company and Director of Sales Manuel Yellen Vice President P. Lorillard Company and Director of Advertising George 0. Davies Vice President, P. Lorillard Company Treasurer and Director of Finance Herbert A. Kent Consultant P. Lorillard Company F. Gladden Searle Industrialist Donald A. Henderson Treasurer Twentieth Century- Fox Film Corp. Melvin E. Dawley Vice President, Lord & Taylor- Director and Department Store General Merchandise Manager 1950 800 shares of Common Stock 1943* 1,250 shares of Common Stock 1956 500 shares of Common Stock 1955 500 shares of Common Stock 1939** 3,000 shares of Common Stock 1943 1,000 shares of Common Stock 1946 328 shares of Common Stock 1950 500 shares of Common Stock Thomas L. Perkins Lawyer Perkins, Daniels, 1955 4,000 shares of McCormack & Common Stock Collins-Law Firm Harold X_ Schreder Executive Distributors Group, 1956 100 shares of Vice President Inc.-Investment Common Stock Bankers Executive Group Securities, Vice President Inc.-Mutual Fund George A. Hoffmann Director of P. Lorillard Company 1957 500 shares of Manufacturing Common Stock * Has served continuously since, except for period January 16, 1950, to April 28, 1953. ** Has served continuously since, except for period September 1, 1955, to December 19, 1956. 3

Each of the nominees named above is now a director of the Company and they, collectively, comprise the entire membership of the Board. Each of such nominees was elected to his present office by a vote of security holders at a meeting for which proxies were solicited under Regulation X-14 of the Securities and Exchange Commission except : Harold X. Schreder, who, for more than the last five years, has been Executive Vice- President of each of Distributors Group, Inc., investment bankers, and Group Securities, Inc., a mutual fund; Manuel Yellen, who, for more than five years prior to his election as a Vice President of the Company, on August 15, 1956, had served the Company in the capacity of West Coast Sales Manager; Herbert A. Kent, who, for more than five years prior to his retirement effective September 1, 1955, had served the Company in various capacities, including, successively, President and Chairman of the Board of Directors ; and George A. Hoffmann, who, for more than five years prior to his election as a director on February 1, 1957, had served the Company in various capacities in the manufacturing department. REMUNERATION OF ALL DIRECTORS AND NOMINEES FOR THE FISCAL YEAR ENDED DECEMBER 31, 1956 The following table sets forth all direct remuneration paid by the Company and its subsidiary for the fiscal year ended December 31, 1956, to (1) each person who was a director of the Company at any time during such year and whose aggregate remunera- tion for such year exceeded $30,000; (2) each person who was one of the three highest paid officers of the Company during such year and whose aggregate remuneration for such year exceeded $30,000; and (3) all persons, as a group, who were directors or officers of the Company at any time during such year : ame alary Amount of Incentive Compensation Paid Currently(b) Capacities an Which Remuneration Was Received Lewis Gruber . . . . . . . . $ 46,000.00 $ 2,500.00 President and Vice President Irvin H. Peak .. ..... 45,000.00 2,500.00 Executive Vice President Joseph J. Blacknall ...... 36,000.00 2,500.00 Vice President H. B. Parmele ........ 36,000.00 2,500.00 Vice President Harold F. Temple ...... 30,411.27 2,500.00 Vice President and employee William J. Halley (a) ..... 44,375.00 2,500.00 President and employee Officers and Directors as a group . 440,771.18 30,400.00 (a) Effective August 1, 1956, Mr. Halley resigned as the President and, effective October 16, 1956, as a Director but continued in the employ of the Company and was paid the aggregate amount of $9,375 for services rendered during the balance of the year. The Company entered into a contract with Mr. Halley under which, beginning April 1, 1957, he is to act as a financial consultant to the President and the Board of Directors in return for compensation at the rate of $25,000 per year. (b) Figures shown in this column are based on the assumption that, in accordance with the proposal set forth below, Article XII of the By-laws of the Company will be amended at the Annual Meeting, as so proposed, retroactive to January 1, 1956. Effective June 30, 1956, Alden James resigned as a director, a Vice President and the Director of Advertising for the Company and entered into a contract with the Company providing for the payment to Mr. James by the Company of salary at the rate in effect at the time of his resignation, namely $36,000 per annum, through June, 1957, and for certain obligations to be performed by him. 4

The following table sets forth, for each person named above, (a) all pension or retirement benefits proposed to be paid to such person under the Employees' Retirement Plan of the Company in the event of retirement at normal retirement date, directly or indirectly, and (b) all benefits proposed to be paid to such person or his beneficiaries (subject to prescribed conditions) for a period of ten years following retirement or other termination of employment out of all incentive compensation to date under Article XII of the By-laws of the Company. Such Article provides for incentive compensation for officers and key personnel not to exceed in the aggregate 10% of consolidated net income before taxes but after various deductions, including provision for dividends on preferred and common stock. me Estimated Annual Benefits on Retirement under Employees' Retirement Plan(1) Present Estimated Annual Benefits on Retirement Under Article XII of By-laws(.°L) Lewis Gruber . . . . . . . . $10,140.00 $ 3,579.00 Irvin H. Peak . . . . . . . . 8,667.00 5,009.44 Joseph J. Blacknall . . . . . . 4,061.00 4,558.67 H. B. Parmele . . . . . . . . 8,780.00 1,347.60 Harold F. Temple . . . . . . 11,453.00 647.16 William J. Halley . . . . . . 16,493.00 3,282.13 Officers and Directors as a group . 21,269.11 (1) In each case, the estimate assumes continued employment at salary rate in effect December 31, 1956, until normal retirement date. (2) Such estimate assumes continued employment and may increase under the operation of such Article XII for future years but, subject to the conditions referred to in clause (b) above, cannot decrease. Figures in this column are based on same assumption as that stated in footnote (b) above. All of the remuneration set forth was received by the persons named in their capacities as officers or employees of the Company. The firm of Perkins, Daniels, McCormack & Collins, General Counsel to the Company (of which firm Mr. Thomas L. Perkins, a director of the Company, is a member), received $40,000 for legal services in 1956. PROPOSED AMENDMENT TO THE BY-LAWS Section 1 of Article XII of the By-laws provides for incentive compensation for the Company's officers and key personnel based on the Company's "incentive compensation income", as therein defined. Under such Section, as now in effect, it is likely that there would be included, in computing such "incentive compensation income", the gain on the sale early in 1956 to Consolidated Cigar Corporation of the Company's Cigar Division and the gain on the sale earlier this year to Philip Morris Incorporated of land and a building of the Company in Richmond, Virginia. The management of your Company believes that gains of that type should be excluded in computing such "incentive compensation income" and, for that purpose. 5

it is submitting to the stockholders a proposed amendment of such Section 1 whereby such Section, as amended, would read as follows (material changed or added being indicated by underlining) : "SECTION 1. As soon as reasonably may be after the end of the calendar year 1956, and of each calendar year of the Company's existence thereafter, the Treasurer shall submit to the Board of Directors a certificate (which certificate shall be endorsed with the approval of the independent Auditors of the Company) certifying the amount of 'incentive compensation income' for such calendar year, which 'incentive compensation income' shall be an amount equal to the consoli- dated net income of the Company and its subsidiary companies for such calendar year, determined in accordance with generally accepted principles of accounting, except that all gains resulting from the sale or other disposition of capital assets, after deducting expenses properly attributable to such sale or other disposition, otherwise than in the ordinary course of the business of the Company shall be disregarded, such consolidated net income to be figured before deducting Federal taxes based on income or the payments or accruals to be made pursuant to this By-law, minus the sum of (a) 38% of such consolidated net income so figured, (b) an amount equal to the dividends for such calendar year to which the holders of any outstanding stock of the Company other than the Common Stock of the Company may be entitled, and (c) an amount equal to $1.20 per share on the average number of shares of the Common Stock of the Company outstanding during such calendar year. For the purpose of this paragraph any stock of any class held in the treasury of the Company shall be considered not to be outstanding." The term "the sale or other disposition of capital assets * * * otherwise than in the ordinary course of business" would include the above-mentioned sale of the Company's Cigar Division and the above-mentioned sale of land and a building to Philip Morris Incorporated. The phrase "expenses properly attributable to such sale or other disposition" would include the expense of carrying a building after manufacturing in it had ceased. The net result of the proposed amendment would be to limit "incentive compensation income" to the earnings of the Company's business as a manufacturer and merchant of tobacco and other products. Under the By-law, as proposed to be amended, the amounts payable to or to be accrued for officers and key personnel for each calendar year beginning with the year 1956 equal in the aggregate 10% of "incentive compensation income" which is arrived at as follows : From the consolidated net income of the Company and its subsidiary com- panies for such year, disregarding gains of the type mentioned above in this section of the proxy statement, before taking into account Federal taxes based on income or payments or accruals under the By-law, there are deducted 38% of such consolidated net income so figured and stated amounts in respect of the Company's Preferred Stock and Common Stock. The following percentages of such "incentive compensation income" are to be paid to or accrued for the benefit of the following persons: (a) 1% to the President; (b) 8/10 of 1% to the Executive Vice President; (c) 6/10 of 1% to each of not more than four Vice Presidents; and (d) 5.8% to such other officers and key personnel, including persons who are members of the Board, and in such amounts, but not in excess of 4/10 of 1% to any one person, as the Board shall determine. Provision is made for the con- tingency of vacancies in the office of President, Executive Vice President and Vice Presi- dent during all or any part of the year and it is required that any amount allocated to the President and Vice Presidents which shall not be paid to or accrued for them, or which, after being accrued, shall be forfeited, be paid to the other officers and key personnel. 6

The President is required to recommend to the Board the persons and amounts referred to in clause (d) above and the Board cannot increase any amount so recommended for a person who is a member of the Board. The Board or a committee appointed by it may determine what part, if any, of the amount so allocated to an individual, instead of being paid to him following allocation, shall be paid to him or his beneficiary, without interest, in a future year or years upon terms and conditions to be fixed by the Board or such committee, as the case may be. The By-law can only be amended or repealed by the stockholders and it provides that the directors shall, at least once in every five years, present it to a meeting of stock- holders for such action as the stockholders care to take. Pursuant to the authorization granted to the Board or a committee appointed by it, as stated above, a Committee on Incentive Compensation appointed by the Board has adopted rules and regulations under which, in general, there may become contingently payable in the future a portion of a particular individual's allocated amount, such portion, if any, being determined according to a formula of general application. Provision is also made in such rules and regulations for partial or complete forfeiture of any amount so contingently payable in the future in the event the particular individual shall leave the employ of the Company within stated periods or shall engage in competitive activity. The Company normally has a President, one Executive Vice President and four other Vice Presidents. Since the aggregate number of persons referred to in clause (d) above is to be determined by the Board of Directors, it is not possible to state such aggregate number for the year 1957. For the year 1956, the number of persons in that class was 234. If the proposed amendment shall be adopted, the aggregate amount set aside with respect to the year 1956 will be $88,565, of which there will be set aside $53,086.65 for officers and directors and $35,478.35 for other employees. If the amend- ment should not be adopted, the aggregate amount set aside for all directors, officers and other employees would be $118,992. The affirmative vote of two-thirds in interest of each class of stockholders present at the meeting is required in order that the proposed amendment may be adopted. If the proposed amendment shall not be adopted, the By-law, in its present form, will remain in full force and effect, and payments will be made thereunder in accordance with its terms. AUDITORS The Board of Directors has appointed Messrs. Haskins & Sells, Certified Public Account- ants, to be the independent Auditors of your Company, and a representative of that firm will be present at the Annual Meeting of Stockholders. CONCLUSION The Annual Meeting is called for the purpose of electing Directors, for the purpose of voting with respect to the proposal to amend Article XII of the By-laws as set forth above and for the transaction of such other business as may properly come before the meeting. At the date of this Proxy Statement the management knows of no other matters which may come before the meeting. However, if any other matters properly come before the meeting, it is the intention of the persons named in the enclosed form of proxy to vote such proxy in accordance with their judgment. Dated March 1, 1957. 7

; PROXY Please sign on reverse side AND MAIL IN THE ENCLOSED ENVELOPE NO POSTAGE IS REQUIRED. P. LORILLARD COMPANY PROXY FOR ANNUAL MEETING APRIL 2, 1957 The undersigned, revoking all prior proxies given for the Annual Meeting of Stockholders of P. Lorillard Company, to be held on Tuesday, April 2, 1957, hereby appoints Lewis Gruber, President, Irvin H. Peak, Executive Vice President, and Anna F. Woessner, Secretary, and each of them proxies of the undersigned, with full power of substitution and revocation, a majority of such of said proxies or substitutes as shall be present and acting to act with all powers of the undersigned, with respect to all shares of stock as to which the undersigned is entitled to act at such meeting and any adjournments thereof, and to vote: (1) For the election of Directors of the Company, (2) For or against the proposal described in the Proxy Statement which accompanied this proxy, as indicated in the ballot boxes on the reverse side, and (3) In their discretion, upon such other matters as may properly come before the meeting. (Continued on reverse side) P. LORILLARD COMPANY PROXY (continued from other side) This proxy is to be voted FOR E] AGAINST Q the proposal to amend Article XII of the By-Laws relating to incentive compensation. If no preference is marked above, this proxy will be voted FOR the proposaL ~ ~ PROXY s PLEASE DO NOT FOLD, STAPLE OR DAMAGE PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. JOINT OWNERS SHOULD EACH SIGN PERSONALLY. WHEN SIGNING AS ATTORNEY, EXECU- TOR, ADMINISTRA. TOR,TRUSTEE, GUARDIAN, ETC., GIVE FULL TITLE. Dated .............................., 1957 Signed .................................................................................................... ............................ THI9 PROXY IS SOLICITED ON BEHALF OF THE MANAGEMENT OF THE COMPANY 9~9C'BL ib

STATE OF NEW YORK ) :ss: COUNTY OF NEW YORK) On this 27th day of March, 1957, before me personally came ANNA F. WOESSNER, to me known, who being by me duly sworn, did depose and say that she resides at Jersey City, County of Hudson, State of New Jersey; that she is Secretary of P. LORILLARD COMPANY, a New Jersey corporation, and was Secretary of said corporation at the times hereinafter mentioned; that she caused a copy of the annexed printed notice signed by her of the Annual Meeting of the Stockholders of the said corporation called to be held at the Ambassador Hotel, New York City, New York, on April 2, 1957, at eleven o'clock in the'forenoon, proxy state- ment, annual report and a form of the annexed proxy, to be mailed, postage prepaid, at least twenty (20) days prior to said meeting to each stockholder of record appearing on the books of said corporation at the close of business on March 5, 1957, addressed to each such stockholder at the address given thereon; and that she caused a public notice of the time and place of holding said meeting to be published on March 19th and 26th, 1957, in The New York Times, a daily newspaper of general circulation, published in the City, County and State of New York. d'. i/ht o ~ a Subscribed and sworn to before me this 27th day of March, 1957: fi'£.TLA13E~°Tr f~i'. P,AI+If* NOTARY PUBI IC. State of Near yeFk No. 41•7418Q25 Qualified in Queens County Cert'if'icate filed with New York County Clerk kT'erm exPires March 30, 1958